Healthlane, a Y Combinator-funded health technology company that provides diagnostic screenings for disease prevention, is currently revising its business model. This follows a six-month operational hiatus and operational challenges that were mentioned at the time by a source.
In the month of April 2023, the company’s decision to change its business model was communicated to the community via an internal email. “We would like to inform you that we are making changes to our business model and would like to apologise for the lack of communication from our team in recent months,” said CEO Alain Nteff in an email.
Nteff also disclosed Healthlane’s intention to stop offering in-person lab testing at its physical sites, which she learned from Healthlane’s CEO.
The hybrid service delivery approach that Healthlane utilised was powered by these sites, which included an app to onboard users, arrange appointments, and evaluate outcomes, as well as a lab where the meetings with doctors and medical tests were carried out. The text of the email stated, “We understand that this may come as a surprise to you, and we want to assure you that we are doing our utmost to make sure that this transition is as smooth as possible.”
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A source was informed in a chat by three former workers of Healthlanes that the company intends to relaunch operations by the end of the year at a new location and destroy its previous database containing client information.
After the onslaught of claims that bordered on founder misconduct and funds mismanagement, they portrayed an image of a corporation that is striving to reinvent itself in order to move past the situation.
According to the former workers, the majority of the Nigerian employees who were working for the company at the time of the incident have since been let go from their positions.
The aforementioned email from Nteff was closed with the following statement: “Furthermore, you have until the end of this year to download your health data and care plan from the mobile app.”
This statement lends credence to the statements made by former employees whom we spoke with, who insisted that users would no longer have access to the database after the end of the year.
Transformations and Healthlane’s bright future
Talia Frenkel, who worked for Y Combinator, came up with the idea for the brand name Healthlane when the company, which had previously been known as Gifted Mom and was accepted into the winter batch of the accelerator in 2020.
After finishing their degrees, the founders of Healthlane went on to fund $2.4 million in order to develop an app that would facilitate telemedicine and the ordering of medications. However, just a few months following the funding round, Nteff refocused the company on its preventive healthcare play, which is primarily concerned with the delivery of preventative healthcare services.
Nteff reportedly stated, as reported by several former workers, that certain investors were not thrilled about this pivot, as it was not discussed throughout the process of investing in the company.
Now, following what appears to be a difficult period for Healthlane, the company appears to be on the cusp of making yet another course correction. Perhaps one that will help the startup realise its early goals of becoming a telemedicine company with an emphasis on e-commerce.
When this article was being published, Alain Nteff had not yet responded to an email sent by the source.
Tracking the Cause of Healthlane’s Fall
Healthlane was a member of the winter batch of companies accepted into Y Combinator in the year 2020. After completing the programme at the accelerator, they were able to secure $2.4 million in funding from some of the most prominent investors in Silicon Valley, including Sequoia Capital and Silicon Valley Bank, and they were ready to take the healthcare industry by storm.
According to interviews with 12 former and present workers of the startup, all of whom spoke on the condition of anonymity, an approaching implosion began to simmer at the company during the second half of 2021.
It all started when Nteff started making adjustments to various marketing initiatives and product features. During product meetings, Nteff would unexpectedly make adjustments or request additional features, which frequently caused disruption to the plans that had been previously agreed upon.
Nteff’s string of irrational choices ultimately resulted in the departures of several employees and their termination. In spite of Nteff’s assurances to employees that the business had more than one million dollars in cash in the bank, the company was unable to pay employee salaries by the end of the year 2021.
It is not quite obvious how Healthlane was able to blow through $2.4 million in a single year, but many former employees have a sneaking suspicion that some of the cash was diverted to activities and businesses unrelated to Healthlane.